Living life as a freelancer is rewarding, freeing and if you’re not careful can leave a full-time freelancer BROKE. How does that happen you ask? You see some freelancers work all year, have a strong network of clients, making money consistently BUT every month it’s a struggle to pay for rent. Does this sound like you? If you take a step back and compare this year’s profits to last year you notice a hefty loss. The scary part is, if you’re not careful you can be walking down this same path. Today, we’re going to dive into how freelancers should deal with money.
How Freelancers Should Deal With Money
1. Keep Track Of Everything You Spend
Being a freelancer is like running your own business. Everything is up to you. From getting new clients to buying the needed supplies to complete a gig. Freelancers run their own business. It’s surprising how many freelancers purchase goods for their business and don’t keep track of it. This is bad business guys.
You don’t need a fancy financial app to keep you on track. There are plenty out there some paid and some free. I’m not going to dive into those. I’m going to talk about basic actionable solutions you can do right now. In most cases, everyone has access to excel.
Create an excel document and build it out to list the date, cost, client, reason for purpose and any notes you want to include. Be strict with this form. Every week make sure to go back and double check this form is up to date.
After a couple months, you’ll notice where you tend to spend the most amount of money. See if you can find ways to cut that back or maybe buy in bulk. If you can’t you can’t. But depending on what part of the world you live, you may be able to use these purchases as a tax write off.
2. Put Money Aside
This is the hardest thing to do as a freelancer. Every dollar counts and it’s honestly VERY EASY to spend it all. So why in the world would you want to put any of the money away? It doesn’t make sense. Well, things may be good right now. You may be bringing in steady revenue and that’s great. But never forget how hard it was to get here. Always stay humble to that reality.
There will come a point where you may want to retire. There may come a day where a family emergency comes up and you need that safety net, or maybe your car breaks down and you need extra funds, or maybe it’s tax season and now you owe the government a lot of money.
Look at the income you bring in and start putting money aside with every paycheck. It doesn’t have to be a huge portion, but it should be a good percentage that you promise to never touch because it is an investment for your future.
3. Set Goals
Working as a freelancer can be very rewarding but don’t let the highs take away from setting a long term plan. What is your long term plan? If you don’t have a plan now is the time to create one. Ask yourself where you want to be in the next 3 months, 6 months, 5 years and so on and so forth.
After you have those goals in place, start plotting how you plan on hitting those goals. The last step here is to hold yourself accountable. You are free to change these goals so they work with your lifestyle but remember without goals and a plan you will not improve. You’ll just get by.
There is no “should” there is only what there is. We have said this a million times being a freelancer IS like running your own business. It’s not easy. Don’t get too comfortable with making money. Have a plan in place for success and watch your finances carefully. On goLance, you have access to your goWallet to see where you are at month to month — leverage this tool.